September 1, 2023

Infuriating spin from various health plan representatives (quoted in the article below) as to the reasons for their requests for massive rate increases.  Blaming providers (and taking no accountability for their own role) when insurer profits are high (without their adding real value) is unacceptable.

(From today’s Crain’s Health Pulse, 9/1/2024)

New York’s Department of Financial Services gave insurance companies the go ahead to raise premiums in 2024 by an average of 12.4% for individual plans and 7.4% for small-group plans, the agency said Thursday.

The rate increase for individual insurance plans is 44% lower than what the insurers hoped for when they submitted their plans back in May. The department said its cut to the rate proposals will save $126 million for the 248,000 New Yorkers insured under individual plans.

Rates for individual plans will be even lower for people who are eligible for federal tax credits, the agency said. Last year, over 60% of New Yorkers who enrolled in an individual plan through the New York State of Health, the state’s insurance marketplace, were eligible for tax credits that lowered premium costs.

The department reduced proposed rates for small-group plans, which cover businesses with up to 100 employees, by around half, which it says will save small businesses $607 million next year. Around 800,000 New Yorkers are covered under small business plans.

Next year’s rate increases are fairly consistent with the agency’s decision on rates for 2023, indicating that the costs of insurance claims have risen for health insurers. Last year, the department approved increases of 9.7% for individual plans and 7.9% for small-group plans—following record-low individual rate increases during the Covid-19 pandemic.

Ciara Marangas, a spokesperson for the Department of Financial Services, said that the agency reviews each application to make sure that approved rates are sufficient to cover insurers’ estimated medical claims.

“The medical costs associated with those claims have continued to rise, which in turn has resulted in higher premiums,” Marangas said.

Eric Linzer, president and CEO of the New York Health Plan Association, said in a statement that the rates proposed by health insurers back in May reflect the increasing costs of health care.

“New York’s health care costs are among the highest in the country,” Linzer said, noting that rising medical costs are driven by high reimbursement rate charges from hospitals and physicians, double-digit growth in the price of prescription drugs and government taxes on health insurers.

“Given these factors, greater focus is needed to rein in the escalating costs hospitals, providers and drug companies are charging to provide relief for consumers and employers,” Linzer said.

“The rates truly do reflect the underlying costs of health care,” said Leslie Moran, senior vice president of the association, which represents 28 insurance providers in New York state. “When a plan’s requests are reduced, it could lead to shortfalls in the future.”

IHBC, a subsidiary of the Independent Health Association, was approved to increase premiums for individual plans by 25.3%, the highest of any insurance provider in the state. The provider requested an increase of 39.2%.

Emblem Health, which covers 3 million people in the New York tri-state area, was approved for a 25.1% rate increase for individual plans. The provider requested an increase of 52.7%.

Kim Kann, Emblem Health’s vice president of public relations, said that the insurer is “extremely mindful of the impact that rate increases have on our policyholders.”

“Our requested rate increases reflect the cost of health care provided to our members, many of whom are very sick,” Kann said. “We are committed to continue working with legislators, state officials, providers, and others to address affordability and the consequences of healthcare disparities in New York.”

No insurance companies plan to lower rates next year, according to the department’s list of approved rate actions.

Rate increases do not impact enrollees of New York’s Essential Plan, a low-cost public insurance option which does not charge premiums for New Yorkers who qualify. The Essential Plan currently covers individuals up to 200% of the federal poverty threshold, but government officials submitted a waiver to the federal government this year to expand eligibility to those with incomes up to 250% of the poverty line. —Amanda D’Ambrosio